Palantir shares rally as investors shift from semiconductors to AI software, fueled by a new Nvidia partnership and short-covering.
Palantir (NASDAQ:PLTR) shares climbed 18% over the past week as investors rotated from semiconductor stocks into AI software plays. The surge follows a new collaboration with Nvidia (NASDAQ:NVDA) to build government AI models using Nvidia’s Nemotron, pressuring short sellers and supporting the stock’s 145x trailing P/E multiple.
Despite an 85% revenue growth last quarter, some analysts argue Nvidia may offer better value. Short interest has eased, with high-profile investor Michael Burry covering half his short position a week ago. The stock’s rebound suggests renewed confidence in AI software leadership.
The partnership with Nvidia highlights Palantir’s push to solidify its position in the AI sector, countering recent skepticism about AI hype. CEO Alex Karp’s criticism of current AI marketing trends has also resonated with investors.